federal common law

American Electric Power Co. v. Connecticut

Issues

Whether a party can assert a federal common claim challenging a company’s carbon dioxide emissions as a public nuisance, or whether such efforts to curb emissions should be brought solely through the legislative process.

 

Several states brought suit against various power companies, arguing that the companies’ carbon emissions create a public nuisance – i.e. harm the public welfare – by contributing to global warming and damaging the environment. The district court dismissed the claim before trial, holding that disputes concerning global warming are “political questions” that should be resolved by the legislature, not the courts. However, the Second Circuit Court of Appeals held that courts are allowed to hear such cases, and that such disputes are not restricted to resolution in the political arena. Furthermore, the Second Circuit held that allowing such cases does not alleviate a plaintiff’s heavy burden of proving its side of the dispute in court. The decision will depend on whether the Supreme Court feels that the judiciary can properly handle such claims, or whether the complexity, controversy, and volume of such cases counsel in favor of dismissing this initial suit.

Questions as Framed for the Court by the Parties

1. Whether States and private parties have standing to seek judicially-fashioned emissions caps on five utilities for their alleged contribution to harms claimed to arise from global climate change caused by more than a century of emissions by billions of independent sources.

2. Whether a cause of action to cap carbon dioxide emissions can be implied under federal common law where no statute creates such a cause of action, and the Clean Air Act speaks directly to the same subject matter and assigns federal responsibility for regulating such emissions to the Environmental Protection Agency.

3. Whether claims seeking to cap defendants' carbon dioxide emissions at "reasonable" levels, based on a court's weighing of the potential risks of climate change against the socioeconomic utility of defendants' conduct, would be governed by "judicially discoverable and manageable standards" or could be resolved without "initial policy determination[s] of a kind clearly for nonjudicial discretion." Baker v. Carr, 369 U.S. 186, 217 (1962).

In July 2004, the States of Connecticut, New York, California, Iowa, New Jersey, Rhode Island, Vermont, and Wisconsin, and the City of New York (collectively “Connecticut”) filed a complaint against American Electric Power Company, Southern Company, the Tennessee Valley Authority, Xcel Energy, and Cinergy (c

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Rodriguez v. Federal Deposit Insurance Corp.

Issues

Should state law or federal common law principles govern the ownership of a tax refund paid to a corporate parent, but solely attributable to a corporate subsidiary, as part of a consolidated tax return?

This case asks the Supreme Court to determine whether state law or federal common law principles govern the ownership of a tax refund solely attributable to a single corporate subsidiary but received from the IRS by that subsidiary’s corporate parent as part of a consolidated tax return. Petitioner Simon E. Rodriguez, Chapter 7 Trustee for the bankruptcy estate of United Western Bancorp., Inc., contends that this area of law is not open to federal common lawmaking and thus should be governed by state agency law. Respondent Federal Deposit Insurance Corporation, Receiver for United Western Bank, counters that the issue here is not governed by federal common law in the strict sense, but rather by interpretations of Internal Revenue Service regulations that inform private party contract interpretation. The outcome of this case will have implications on the equitable ownership interests of tax refunds issued to corporate parents on behalf of their subsidiaries as part of consolidated tax returns.

Questions as Framed for the Court by the Parties

Whether courts should determine ownership of a tax refund paid to an affiliated group based on the federal common law “Bob Richards rule,” as three circuits hold, or based on the law of the relevant state, as four circuits hold.

On January 1, 2008, United Western Bancorp, Inc. (“UWBI”), a bank holding company, entered into a Tax Allocation Agreement (“the Agreement”) with its affiliate subsidiary corporations, including its principal subsidiary, United Western Bank (“Bank”). Rodriguez v.

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